Florida Senate - 2013                              CS for SB 866
       
       
       
       By the Committee on Banking and Insurance; and Senator Abruzzo
       
       
       
       
       597-02820-13                                           2013866c1
    1                        A bill to be entitled                      
    2         An act relating to the certified audit program;
    3         amending s. 213.21, F.S.; revising the amounts of
    4         interest liability that the Department of Revenue may
    5         abate for taxpayers participating in the certified
    6         audit program; authorizing a taxpayer to participate
    7         in the certified audit program after the department
    8         has issued notice of intent to conduct an audit of the
    9         taxpayer; reducing the amount of interest that may be
   10         abated for a taxpayer requesting to participate in the
   11         program; amending s. 213.285, F.S.; conforming
   12         provisions; specifying the tax programs to be audited;
   13         revising procedures, deadlines, and notice
   14         requirements for certified audits; authorizing the
   15         department to adopt rules prohibiting a qualified
   16         practitioner from representing a taxpayer in informal
   17         conference procedures under certain circumstances;
   18         amending s. 213.053, F.S.; conforming terminology;
   19         providing an effective date.
   20  
   21  Be It Enacted by the Legislature of the State of Florida:
   22  
   23         Section 1. Subsection (8) of section 213.21, Florida
   24  Statutes, is amended to read:
   25         213.21 Informal conferences; compromises.—
   26         (8) In order to determine whether certified audits are an
   27  effective tool in the overall state tax collection effort, the
   28  executive director of the department or the executive director’s
   29  designee shall settle or compromise penalty liabilities of
   30  taxpayers who participate in the certified audit program audits
   31  project. As further incentive for participating in the program,
   32  the department shall:
   33         (a) For a taxpayer who requests to participate in the
   34  program before the department has issued the taxpayer a written
   35  notice of intent to conduct an audit, abate the first $50,000 of
   36  any interest liability and 50 percent of any interest due in
   37  excess of the first $50,000; or
   38         (b) For a taxpayer who requests to participate in the
   39  program after the department has issued the taxpayer a written
   40  notice of intent to conduct an audit, abate the first $15,000
   41  $25,000 of any interest liability and 15 25 percent of any
   42  interest due in excess of the first $15,000 $25,000.
   43  
   44  A settlement or compromise of penalties or interest pursuant to
   45  this subsection is shall not be subject to the provisions of
   46  paragraph (3)(a), except for the requirement relating to
   47  confidentiality of records. The department may consider an
   48  additional compromise of tax or interest pursuant to the
   49  provisions of paragraph (3)(a). This subsection does not apply
   50  to any liability related to taxes collected but not remitted to
   51  the department.
   52         Section 2. Section 213.285, Florida Statutes, is amended to
   53  read:
   54         213.285 Certified audits.—
   55         (1) As used in this section, the term:
   56         (a) “Certification program” means an instructional
   57  curriculum, examination, and process for certification,
   58  recertification, and revocation of certification of certified
   59  public accountants which is administered by an independent
   60  provider and which is officially approved by the department to
   61  ensure that a certified public accountant possesses the
   62  necessary skills and abilities to successfully perform an
   63  attestation engagement for tax compliance review in the a
   64  certified audit program audits project.
   65         (b) “Department” means the Department of Revenue.
   66         (c) “Participating taxpayer” means any person subject to
   67  the revenue laws administered by the department who enters into
   68  an engagement with a qualified practitioner for tax compliance
   69  review and who is approved by the department under the certified
   70  audit program audits project.
   71         (d) “Qualified practitioner” means a certified public
   72  accountant who is licensed to practice in Florida and who has
   73  completed the certification program.
   74         (2)(a) The department may is authorized to initiate a
   75  certified audit program for sales and use taxes imposed under
   76  chapter 212 and local option taxes imposed under ss. 125.0104
   77  and 125.0108 and administered by the department audits project
   78  to further enhance tax compliance reviews performed by qualified
   79  practitioners and to encourage taxpayers to hire qualified
   80  practitioners at their own expense to review and report on their
   81  tax compliance. The nature of certified audit work performed by
   82  qualified practitioners shall be agreed-upon procedures in which
   83  the department is the specified user of the resulting report.
   84         (b) As an incentive for taxpayers to incur the costs of a
   85  certified audit, the department shall compromise penalties and
   86  abate interest due on any tax liabilities revealed by the a
   87  certified audit:
   88         1. For a taxpayer who requests to participate in the
   89  certified audit program before the department has issued the
   90  taxpayer a written notice of intent to conduct an audit, as
   91  provided in s. 213.21(8)(a); or
   92         2. For a taxpayer who requests to participate in the
   93  certified audit program after the department has issued the
   94  taxpayer a written notice of intent to conduct an audit, as
   95  provided in s. 213.21(8)(b) 213.21.
   96  
   97  The This authority to compromise penalties or abate interest
   98  under this paragraph does shall not apply to any liability for
   99  taxes that were collected by the participating taxpayer but that
  100  were not remitted to the department.
  101         (3) Any practitioner responsible for planning, directing,
  102  or conducting a certified audit or reporting on a participating
  103  taxpayer’s tax compliance in a certified audit must be a
  104  qualified practitioner. For the purposes of this subsection, a
  105  practitioner is considered responsible for:
  106         (a) “Planning” in a certified audit when performing work
  107  that involves determining the objectives, scope, and methodology
  108  of the certified audit, when establishing criteria to evaluate
  109  matters subject to the review as part of the certified audit,
  110  when gathering information used in planning the certified audit,
  111  or when coordinating the certified audit with the department.
  112         (b) “Directing” in a certified audit when the work involves
  113  supervising the efforts of others who are involved or when
  114  reviewing the work to determine whether it is properly
  115  accomplished and complete.
  116         (c) “Conducting” a certified audit when performing tests
  117  and procedures or field audit work necessary to accomplish the
  118  audit objectives in accordance with applicable standards.
  119         (d) “Reporting” on a participating taxpayer’s tax
  120  compliance in a certified audit when determining report contents
  121  and substance or reviewing reports for technical content and
  122  substance before prior to issuance.
  123         (4)(a) A The qualified practitioner shall notify the
  124  department of an engagement to perform a certified audit and
  125  shall provide the department with the information that the
  126  department deems necessary to identify the taxpayer, to confirm
  127  whether that the taxpayer is not already under audit by the
  128  department, and to establish the basic nature of the taxpayer’s
  129  business and the taxpayer’s potential exposure to the Florida
  130  revenue laws administered by the department. Once the department
  131  has issued a taxpayer a written notice of intent to conduct an
  132  audit, if the taxpayer requests to participate in the certified
  133  audit program, the qualified practitioner or the taxpayer,
  134  within 30 days after the notice of intent to conduct the audit
  135  was issued to the taxpayer, must notify the department of the
  136  engagement to perform the certified audit.
  137         (b) The information provided in the notification must shall
  138  include the taxpayer’s name, federal employer identification
  139  number or social security number, state tax account number,
  140  mailing address, and business location, and the specific taxes
  141  and period proposed to be covered by the engagement for the
  142  certified audit. In addition, the notice must shall include the
  143  name, address, identification number, contact person, email
  144  address, and telephone number of the engaged firm.
  145         (c)(b)Upon the department’s receipt of the engagement If
  146  the taxpayer has not been issued a written notice of intent to
  147  conduct an audit, the taxpayer becomes shall be a participating
  148  taxpayer, and the department shall so advise the qualified
  149  practitioner in writing within 10 days after receipt of the
  150  engagement notice. However, the department may exclude a
  151  taxpayer from a certified audit or may limit the taxes or
  152  periods subject to the certified audit on the basis that the
  153  department has previously conducted an audit or, that it is in
  154  the process of conducting an investigation or other examination
  155  of the taxpayer’s records, or for just cause determined solely
  156  by the department.
  157         (d)(c) Notice of the qualification of a taxpayer for a
  158  certified audit tolls shall toll the statute of limitations
  159  provided in s. 95.091 with respect to the taxpayer for the tax
  160  and periods covered by the engagement.
  161         (e)(d) Within 30 days after receipt of the notice of
  162  qualification from the department, The qualified practitioner
  163  shall contact the department and, within the following periods,
  164  shall submit a proposed audit plan and procedures for review and
  165  agreement by the department:
  166         1. For a taxpayer who requests to participate in the
  167  certified audit program before the department has issued the
  168  taxpayer a written notice of intent to conduct an audit, within
  169  30 days after receipt of the notice of qualification from the
  170  department; or
  171         2. For a taxpayer who requests to participate in the
  172  certified audit program after the department has issued the
  173  taxpayer a written notice of intent to conduct an audit, within
  174  60 days after the department issued the taxpayer the notice of
  175  intent to conduct the audit.
  176  
  177  The department may extend the time for submission of the plan
  178  and procedures for reasonable cause. The qualified practitioner
  179  shall initiate action to advise the department that amendment or
  180  modification of the plan and procedures is necessary in the
  181  event that the qualified practitioner’s inspection reveals that
  182  the taxpayer’s circumstances or exposure to the revenue laws is
  183  substantially different than as described in the engagement
  184  notice.
  185         (f) If the taxpayer has been issued a written notice of
  186  intent to conduct an audit but submits a proposed audit plan and
  187  procedures in accordance with subparagraph (e)2. within 90 days
  188  after the notice of intent was issued to the taxpayer, the
  189  department shall designate the agreed upon procedures to be
  190  followed by the qualified practitioner in the certified audit.
  191         (5) Upon the department’s designation of the agreed-upon
  192  procedures to be followed by the practitioner in the certified
  193  audit, the qualified practitioner shall perform the engagement
  194  and shall timely submit a completed report to the department.
  195  The report must shall affirm completion of the agreed-upon
  196  procedures and shall provide any required disclosures. For a
  197  certified audit completed pursuant to agreed-upon procedures
  198  designated by the department under paragraph (4)(f), the
  199  completed report is considered timely only if submitted to the
  200  department within 285 days after the notice of intent to conduct
  201  the audit was issued to the taxpayer.
  202         (6) The department shall review the report of the certified
  203  audit and shall accept it when it is determined to be complete.
  204  Once the report is accepted by the department, the department
  205  shall issue a notice of proposed assessment reflecting the
  206  determination of any additional liability reflected in the
  207  report and shall provide the taxpayer with all the normal
  208  payment, protest, and appeal rights with respect to the
  209  liability. In cases where the report indicates an overpayment
  210  has been made, the taxpayer shall submit a properly executed
  211  application for refund to the department. Otherwise, the
  212  certified audit report is a final and conclusive determination
  213  with respect to the tax and period covered. An No additional
  214  assessment may not be made by the department for the specific
  215  taxes and period referenced in the report, except upon a showing
  216  of fraud or misrepresentation of material facts and except for
  217  adjustments made under s. 198.16 or s. 220.23. This
  218  determination does shall not prevent the department from
  219  collecting liabilities not covered by the report or from
  220  conducting an audit or investigation and making an assessment
  221  for additional tax, penalty, or interest for any tax or period
  222  not covered by the report.
  223         (7) To implement the certified audit program audits
  224  project, the department may shall have authority to adopt rules
  225  relating to:
  226         (a) The availability of the certification program required
  227  for participation in the certified audit program project;
  228         (b) The requirements and basis for establishing just cause
  229  for approval or rejection of participation by taxpayers;
  230         (c) Procedures for assessment, collection, and payment of
  231  liabilities or refund of overpayments and provisions for
  232  taxpayers to obtain informal and formal review of certified
  233  audit results;
  234         (d) The nature, frequency, and basis for the department’s
  235  review of certified audits conducted by qualified practitioners,
  236  including the requirements for documentation, work-paper
  237  retention and access, and reporting; and
  238         (e) Requirements for conducting certified audits and for
  239  review of agreed-upon procedures; and
  240         (f) Circumstances under which a qualified practitioner who
  241  conducts a certified audit for a taxpayer after the department
  242  has issued the taxpayer a written notice of intent to conduct
  243  the audit is prohibited from representing the taxpayer in
  244  informal conference procedures established pursuant to s.
  245  213.21.
  246         Section 3. Paragraph (m) of subsection (8) of section
  247  213.053, Florida Statutes, is amended to read:
  248         213.053 Confidentiality and information sharing.—
  249         (8) Notwithstanding any other provision of this section,
  250  the department may provide:
  251         (m) Information contained in returns, reports, accounts, or
  252  declarations to the Board of Accountancy in connection with a
  253  disciplinary proceeding conducted pursuant to chapter 473 when
  254  related to a certified public accountant participating in the
  255  certified audit program audits project, or to the court in
  256  connection with a civil proceeding brought by the department
  257  relating to a claim for recovery of taxes due to negligence on
  258  the part of a certified public accountant participating in the
  259  certified audit program audits project. In any judicial
  260  proceeding brought by the department, upon motion for protective
  261  order, the court shall limit disclosure of tax information when
  262  necessary to effectuate the purposes of this section.
  263  
  264  Disclosure of information under this subsection shall be
  265  pursuant to a written agreement between the executive director
  266  and the agency. Such agencies, governmental or nongovernmental,
  267  shall be bound by the same requirements of confidentiality as
  268  the Department of Revenue. Breach of confidentiality is a
  269  misdemeanor of the first degree, punishable as provided by s.
  270  775.082 or s. 775.083.
  271         Section 4. This act shall take effect July 1, 2013.